Demand response program in Singapore’s wholesale electricity market

Abstract

Singapore is going to implement a demand response (DR) program to further enhance the efficiency and competitiveness of its electricity market. This paper aims to provide an in-depth investigation of this DR program which features demand side bidding and incentive payments. First, the current market clearing model (MCM) of Singapore’s existing wholesale market, which has no demand side bidding, is introduced. A mathematical model of the MCM is formulated to explain and solve the current market clearing process, where the energy and ancillary services are settled simultaneously through a form of auction pricing. Second, the mechanism of how the demand side bidding is incorporated into the current MCM is explained, with an emphasis on the demand side offer and the newly introduced constraints. A modified MCM with DR is then formulated. Third, the incentive payment mechanism intended to promote DR participation is elaborated. Numerical analysis is performed to demonstrate how the current MCM and MCM with DR work, as well as how the incentive payment is settled. Various numerical case studies are carried out to discuss the economic benefits from participating in the DR program.